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Chow was born in Lamma Island, Hong Kong to a mother who was a cleaning lady and vegetable farmer, and a father who worked on a Shell Oil Company tanker.[3][4] Of Hakka origins,[5][6] he grew up in a farming community on Lamma Island in a house with no electricity.[7] He woke up at dawn each morning to help his mother sell herbal jelly and Hakka tea-pudding on the streets; in the afternoons he went to work in the fields. His family moved to Kowloon when he was ten. At seventeen, he left school to help support the family by doing odd jobs including bellboy,[8] postman, camera salesman and taxi driver. His life started to change when he responded to a newspaper advertisement and his actor-trainee application was accepted by TVB, the local television station. He signed a three-year contract with the studio and made his acting debut. Chow became a heartthrob and a familiar face in soap operas that were exported internationally.

Chow has been married twice; first in 1983, to Candice Yu, an actress from Asia Television; the marriage lasted nine months. In 1986, Chow married Singaporean Charaine Zheng. The couple have no children, although Chow has a goddaughter, Celine Ng, a former child model for Chickeeduck, McDonald's, Toys'R'Us and other companies.

When Chow appeared in the 1980 TV series The Bund on TVB, it did not take long for him to become a household name in Hong Kong. The series, about the rise and fall of a gangster in 1930s Shanghai, was a hit throughout Asia and made Chow a star.

Although Chow continued his TV success, his goal was to become a big-screen actor. However, his occasional ventures into low-budget films were disastrous. Success finally came when he teamed up with director John Woo in the 1986 gangster action-melodrama A Better Tomorrow, which swept the box offices in Asia and established Chow and Woo as megastars. A Better Tomorrow won him his first Best Actor award at the Hong Kong Film Awards. It was the highest grossing film in Hong Kong history at the time, and set a new standard for Hong Kong gangster films. Taking the opportunity, Chow quit TV entirely. With his new image from A Better Tomorrow, he made many more 'gun fu' or 'heroic bloodshed' films, such as A Better Tomorrow 2 (1987), Prison on Fire, Prison on Fire II, The Killer (1989), A Better Tomorrow 3 (1990), Hard Boiled (1992) and City on Fire’', an inspiration for Quentin Tarantino'sReservoir Dogs.

Chow may be best known for playing honorable tough guys, whether cops or criminals, but he has also starred in comedies like Diary of a Big Man (1988) and Now You See Love, Now You Don't (1992) and romantic blockbusters such as Love in a Fallen City (1984) and An Autumn's Tale (1987), for which he was named best actor at the Golden Horse Awards. He brought together his disparate personae in the 1989 film God of Gamblers (Du Shen), directed by the prolific Wong Jing, in which he was by turns suave charmer, a broad comedian and an action hero. The film surprised many, became immensely popular, broke Hong Kong's all-time box office record, and spawned a series of gambling films as well as several comic sequels starring Andy Lau and Stephen Chow. The often tough demeanor and youthful appearance of Chow Yun-Fat's characters has earned him the nickname "Babyface Killer".

In October 2014, Chow supported the Umbrella Movement, a civil rights movement for universal suffrage in Hong Kong. His political stance eventually resulted in censorship by the Chinese government.[14]

In February 2015, Chow reprised his role as Ken in the sequel From Vegas to Macau II. He was paid 5 million USD (39 million HKD) for the film.[15]

On June 26, 2008, Chow released his first photo collection in Hong Kong, which includes pictures taken on the sets of his films. Proceeds from the book's sales were donated to Sichuan earthquake victims. Published by Louis Vuitton, the books were sold in Vuitton's Hong Kong and Paris stores.[16][17]